Closing of Manhattan, NY, leases extends by 3 months; JV gets $585M loan

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

It now takes an average 19.1 months from an office tenant entering the market to a lease deal being completed in Manhattan, N.Y., roughly three months longer than pre-pandemic, a trend that is delaying the rebound of leasing activity in the borough, according to a study by CBRE.

The study, which looked at new leases larger than 75,000 square feet that closed between January 2017 and June 2022, found that deals struck between April 2020 to June 2022 took 14.5% longer to close compared to deals completed from 2017 to 2019. For leases larger than 250,000 square feet, the timeline lengthens to an additional six months.

The extended timeline is expected to continue due to increased available space and tenants awaiting potential additional options before completing negotiations. Tenants are also hesitant to commit because of uncertainty about the impact of the return to office on space planning and other reasons, according to the report.

CHART OF THE WEEK: 5 REITs reduce dividend in 2021, 2022

⮞ Industrial Logistics Properties Trust announced a dividend cut, the latest U.S. real estate investment trust to do so, in order to improve liquidity as it completed the financing plan for its acquisition of Mountain Industrial REIT LLC.

⮞ Timber REIT CatchMark Timber Trust Inc. reduced its dividend to reflect the loss of asset management fee revenue after the company exited its joint venture with TexMark Timber Treasury L.P..

⮞ As of July 28, 14 REITs are not paying regular dividends on their common stock.

Half-billion loans

* A joint venture comprising King Street Properties LLC, Brookfield Asset Management Inc. and Mugar Enterprises Inc. obtained a $585 million financing for the construction of its Allston LabWorks life sciences development in Boston. Once completed, the project will have 534,000 square feet of lab space, 20,000 square feet of retail space, 35 multi-housing units and a 12,000-square-foot public plaza.

* Preylock Real Estate Holdings LLC secured a $581 million loan from Goldman Sachs for the acquisition of eight warehouses, The Real Deal reported, citing a report from Moody's. The Amazon-leased properties across Indiana, Pennsylvania, Ohio, Louisiana, North Dakota, New Mexico, Arkansas and Alabama total 6.2 million square feet and are valued at $1.3 billion.

* BioMed Realty Trust Inc. obtained $514 million in construction financing for the first phase of its 485,000-square-foot Assembly Innovation Park tower development in Somerville, Mass. The building is expected for completion in the second quarter of 2024.

Portfolio purchases

* Morgan Properties LLC paid $410 million for the purchase of two apartment property portfolios totaling 2,986 units across Illinois and Indiana.

* GID Investment Advisers LLC acquired two industrial portfolios in Maryland and Nevada. The nine-building portfolio in Baltimore and Howard County, Md., and the five-building portfolio in North Las Vegas total 1.39 million square feet.

Retail REITs report strong leasing demand despite inflationary pressures

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